JJ Today

JEHT Done in By Madoff

December 15, 2008 by John Kelly

New York-based grant maker JEHT abruptly closed its doors today because its primary donor's money was lost by the now infamous financial manager Bernard Madoff. Madoff was arrested last week and charged with allegedly operating a scheme that bilked at least $20 billion from investors.

JEHT's main donors, real estate heiress Jeanne Levy-Church and her husband Kenneth Levy-Church, were among those whose money was managed by Madoff.

"We're being told that JEHT funds were with Madoff and that they are ending all funding commitments immediately," said Abby Anderson, executive director of the Connecticut Juvenile Justice Alliance, a JEHT grantee.

JEHT was a moderate spender in juvenile justice, but its closure will have a significant impact because many of its investments piggy-backed on larger ventures by other foundations.

Major projects supported by JEHT include:

*Annie E. Casey Foundation's Juvenile Detention Alternatives Initiative: JEHT has helped support replication of JDAI, a widely renowned effort to reduce the reliance on detention by local juvenile justice systems around the country.

*Missouri model: JEHT provided funding for Santa Clara County, Calif., to hire the Missouri Youth Services Institute, a nonprofit run by Mark Steward, former director of the Missouri Department of Youth Services. MYSI is helping Santa Clara replicate Missouri's use of small, regional facilities and youth development programming to work with incarcerated juvenile offenders.

*Models for Change: JEHT provided grants to a number of organizations that are heavily involved in the MacArthur Foundation's juvenile justice venture, which aims to foster major system reform in four core states. Grantees supported by both foundations include the D.C.-based Center for Children's Law and Policy, Springfield, Ill.-based Juvenile Justice Initiative and Philadelphia-based Juvenile Law Center.

JEHT made $26.4 million in grants during fiscal 2006. Since it was founded in 2000, it has given away more than $62 million.

"They filled a big niche," says David Steinhart, director of the juvenile justice program at Commonweal, a JEHT grantee.

He credits JEHT for wading into policy and advocacy work that was often controversial and required careful consideration of the lobbying rules for foundations and nonprofits. "There are not many foundations that do it that way," Steinhart says.

The complete loss of JEHT's assets means that any payments owed to grantees, even for current-year grants, will not be made.

"Given the circumstances, the foundation is unable to issue any payments on unpaid grants, the unpaid portions of multi-year grants previously made, or give further consideration to any proposals that were in the pipeline," JEHT President Robert Krane wrote in a statement sent to grantees earlier today.

Most grantees contacted by Youth Today say they have not been told much yet and had only received Krane's statement and a public statement from the foundation.

"Obviously, it's not good news for us," Anderson says. "We'll be okay because our funding is fairly diverse. It will mean taking a good, hard look at the budget, though."

Click here for a list of JEHT's active juvenile justice grantees

***UPDATE: A smaller grant maker that is closely related to JEHT is also closing due to losses suffered under Madoff. The New York-based Rockit Fund funded programs, polling and lobbying on a number of civil liberties issues including juvenile justice. It was run by JEHT CEO Robert Crane, and Ken Levy-Church served on its board of directors.

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